California sales spike reflects distress

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The statewide median home price will fall an estimated 31.7 percent in 2008, to $381,000 -- which is the first annual decline in the state since 1996, according to a California Association of Realtors report released this week. An additional 6 percent drop is expected in 2009, to $358,000. Meanwhile, sales of resale detached homes are expected to jump 12 percent to 395,600 in 2008 compared to 2007, with a projected additional 12.5 percent gain in 2009. The sales jump and the tailspin in prices has a lot to do with a spike in distressed sales -- about 19.8 percent of sellers sold their property because they were in default, were in a foreclosure process, or owed more on their mortgage than their home would fetch in a sale. "The increase in sales is largely attributed to the g...